The UK government does not address concerns about tax credits in its autumn statement, but refuses to support indie films

The UK government used its autumn statement to allay industry concerns over the new tax credit but refused to back indie films, while Equity criticized the Conservatives for “undermining public broadcasters and waging a culture war against marginalized groups”. .

Chancellor Jeremy Hunt’s statement released this afternoon dismissed complaints from Warner Bros. and addressed others. Discovery, Paramount and Pinewood by breaking proposed limits on tax credits for so-called “businesses with commercial parties,” while addressing concerns about which documentaries qualify for the tax credit.

Hunt also announced that he would launch a consultation to extend the tax relief to VFX companies.

The lucrative UK Film and Luxury TV Tax Credit, launched more than a decade ago, has been hugely successful. This was simplified by Hunt eight months ago when he announced that a new audiovisual expenditure credit would come into effect next year, combining a number of different credits and releasing a 25% reduction to a 34% credit next year reduced – a real cut increase of 0.5%.

Major players and studios generally welcomed the relief in filings as part of an ongoing government probe into high-end TV and movies. However, limiting companies’ relief from “related party” profits would have resulted in production companies losing money on shows that required them to use third-party suppliers in areas such as VFX, they claimed in their submissions. The move would have led to “market distortions and unequal treatment between vertically integrated companies and discouraged third-party companies and productions from choosing the UK,” WBD’s statement said, adding that it was “in dialogue with”. [the government] about our concerns.”

The government says from today companies will be required to “disclose related party transactions and charge them a fair market price” rather than limit their profits.

The government has also raised concerns about which documentaries qualify for the exemption, saying it will now define a documentary based on whether it “aligns with BFI guidelines”.

The BFI and the British Film Commission secured £2.1m of additional funding to support film and high-end TV production in the UK and help implement the new tax credit.

The shows are expected to return to production in the UK as soon as next year after strikes in the US were called off and the industry is keen for Britain to retain its crown as the world’s leading production centre. Production spending in Britain’s high-end film and television industry is set to reach a record 6.3 billion pounds ($7.6 billion) in 2022, according to the BFI. This was an increase of £1.8bn compared to pre-pandemic levels in 2019 and £600m more than the previous record of $5.6bn last year.

“Undermining our public services”: The industry is respondingion

Producers’ association Pact said the government had “missed an opportunity to address a clear market failure” in the independent film sector after not accepting the association’s offer of tax relief specifically for lower-budget films of £1m to £15m not to increase. 40%.

“A 40% increase in the film tax credit will boost investment in the industry and create jobs and opportunities for new talent, which in turn will benefit the entire audiovisual economy,” said John McVay, chief executive of the Pact , said.

“With the creative industries one of the prime minister’s priority sectors for economic growth, we call on the government not to miss this opportunity to develop a culturally and economically important part of the creative industries.”

Elsewhere, the general secretary of actors’ union Equity criticized the autumn statement for “undermining our public broadcasters and waging a culture war against marginalized groups”.

Equity’s concerns relate to the government’s refusal to make existing cuts to companies such as the BBC – which has suffered £1bn of real losses over the past decade – and undo the local performing arts sector.

Equity also said in the fall statement that it believes “attacks on all Social Security recipients” are “abhorrent,” highlighting in particular the impact it will have on the disabled community. “People with disabilities in particular have been forced time and time again to pay the price for this government’s mismanagement of the economy and public services, as well as its tax cuts for the rich and big corporations,” the union said. “Equality Says ‘Enough’.”